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1. Highway 93 South Improvement ProjectvjV V . MEMO To: Mayor and City C u 1 From: Al Thelen Date: March 19, 1999 Re: Highway 93 South Improvement Project The following data is attached to this memo: 1) A March a $, 1999 report from our consultants Forsgren & Associates. 2) A February 19, 1999 memo I requested from Jim Hansz regarding the potential recovery of the City's investment in the utility costs from landowners. 3) A January 25, 1999 memo from Jim Hansz entitled "Status of US 93 South Improvements Project". 4) An October 26, 1998 report from our consultants, Forsgren & Associates, relating to the utility improvements related to the US 93 South project. The Council has received and discussed the latter two items, but this is your first review of the first two items. Post Office Box 1997 - Kalispell, Montana 59903-1997 "'" 1 • .(406)758-7758NEENNEENNEEMM CURRENT FUNDING PLAN FOR THESE IMPROVEMENTS: Storm Sewer Fund $ 375,000 In proposed FY2000 Budget Downtown Urban Renewal Fund $ 800,000 In proposed FY2000 Budget Airport/Sports Complex Urban Renewal Fund $1,000.000 Will be in FY2001 Budget based on the sale of bonds or a note Combination Water & Sewer Capital Accounts $ 455,000 To be included in FY2001 Budget Total Estimated City Costs $2,630,000 While the project is currently scheduled for construction in June of 2000, Jim Hansz and I both think it could be delayed up to a year. We think that our agreement with the State, which still has to be negotiated, can provide that the $375,000 from our Storm Sewer Fund and the $800,000 from the Downtown Urban Renewal Project can be supplied by the City as soon as it is needed, and that the funds from the Airport/Sports Complex Urban Renewal Fund and the Water and Sewer Capital accounts can be at least delayed until after July 1, 2000, which will place them in the FY 2001 budget. RECOVERY OF UTILITY COSTS: The property owners that will be served by the water and sewer facility would normally be required to pay for the line extensions and lift stations. Since it is economical to put the lines in now, they should not receive a "windfall" at the expense of the City tax and utility ratepayers. If this project is implemented in conjunction with the highway, and I think it should be, the City needs to adopt an ordinance to recover the water and sewer cost. The City also should collect a reasonable interest charge from the date the project is funded and when the facilities are used by the landowner that will be served. If you agree, this ordinance needs to be adopted prior to the approval of the funding for this project. We should have a good discussion of this concept on Monday. ASSOCIATES/INC. CITY OF KALISPELL HIGHWAY 93 SOUTH UTILITY IMPROVEMENTS COUNCIL WORK SESSION March 22, 1999 REVIEW 97-064 • Water, sewer, and storm drain facilities to be upgraded and expanded as part of US Highway 93 South Utility Improvement project. Project limits and utility service areas shown on large maps (Exhibits A-E). • City costs for improvements will be about $2.6 million and various alternatives for providing funding have been discussed. • A plan -in -hand review has approved project plans, including utility improvements, and final plans will be submitted in May. • The project timeline called for a City decision on approach and funding sources by last January - a decision is now needed. WORK SESSION OBJECTIVES • Discuss alternatives in further detail including costs, advantages/disadvantages of delaying extensions, and methods of cost recovery. Discuss possible phased construction. US 93 WATER Costs: Component Work Within City Limits New 12-inch on east side, Kelly Road - Four Comers New 12-inch on west side, Hines Auto - Four Comers City Cost $ 291,000 290,000 249,000 Total $ 830,000 A COMPANY OF PROFESSIONAL ENGINEERS; 15 MADISON AVE, WEST YELLOWTONE, MONTANA 59758 / (406) 646-9340 REXBURG / BOISE / EVANSTON / WEST YELLOWSTONE / SALT LAKE CITY / WENATCHEE • Service area (see Exhibit B). Impacts of delaying extensions: - having to work around relocated power, telephone, and gas lines - disturbing new landscaping, sidewalk, and side street surfaces - lack of fire protection to areas already substantially developed - probable cost increase $180,000 (1999 $) to construct later - potential savings of $28,000/yr for not constructing {portion outside the City by avoiding interest costs Possible project phasing: - construct work within the City with the highway project - install needed crossings outside the City with the highway project - build new waterline down either or both sides of US 93 outside the City to crossing locations (or could plug and cap line at any point, although not recommended) at a later date - note that excavation for waterline outside the City will about double after the highway project is completed due to new highway fills US 93 SEWER • Costs: Area Work Within City Limits East Side 93, Big R - Four Comers West Side 93, Big R - Four Corners Pump Station 1st Force Main 2nd Force Main (future service) • Service area (see Exhibit C) City Cost $ 125,000 260,000 240,000 276,000 198,000 191,000 Total $ 1,290,000 Impacts of delaying extensions: - deper excavation (4-8 ft) at south end due to new highway fills - interference with relocated utilities - sidewalk replacement, side street repair - continued nutrient load to groundwater - probable cost increase $315,000 (1999 $) to construct later - potential savings of $61,000/yr for not constructing portion avoiding interest costs outside the City by • Possible project phasing: - cannot effectively phase construction without major redesign. Present design maximizes service area at least cost for serving that area - could delay installation of second force main - could consider moving pump station further north but later cost of extending service area by either moving pump station or constructing a second one would be cost prohibitive - any construction outside the City limits would require an operational pump station to provide actual service US 93 STORM DRAIN Costs: Area city Cost Radio Station to Four Comers $ 12,000 Four Comers to Kelly Road Kelly Road to 9th Street Service area (see Exhibit D). 197,000 Total $ 375,000 • Storm drain systems will be installed to serve highway project, which includes runoff from the highway and 1/2 block each side. • City can serve an additional 1/2 block each side by paying for necessary pipe size increases as part of the highway project. • Delaying City participation in the storm drain until after the highway project will require either replacing parts of the system with larger pipe (not economically feasible) or requiring on -site detention for all areas to be served. COST RECOVERY FOR OUTSIDE CITY LIMITS US 93 Water: Method Approx Value Proportion of area $ 0.12/ft2 ($5227/ac) Front Foot 55.68/If Hook-up Fee (Additional to current fee) using 100 connections $5,650.00/ea US 93 Sewer: Proportion of area Front Foot Method Approx Value $ 0.15/ft2 ($6534/ac) Hook-up Fee (Additional to current fee) using 100 connections $11,650.00/ea • US 93 Storm Drain: - assess through city-wide fee already in place NOTES FROM DISCUSSION MEMORANDUM February 19,1999 To: Al Thelen, Interim City Manager From: Jim Hansz, Director of Public Wo s / Subject: Costs for US 93 South Improvements I have reviewed costs for water, sewer and storm drainage improvements on US 93 South. If the cost of these improvements is to be recovered through repayment of the City investment by the developing owners as they use utilities in the future, then a formula can be determined for each parcel within each service area. Each of these utility improvements has a definable service area. All calculations are based on the service areas identified in the 8/97 Design Report and costs reported to the City Council in my memo of January 25, 1999. The following cost data is approximate and would require refinement to enhance its accuracy prior to implementation. WATER Service Area is approximately 89.3 acres. The improvement cost is approximately $830,000.00 The cost per acre to recover this investment is... $9,295.00/acre The cost per square foot to recover the investment is... $0.213/square foot SEWER Service Area is approximately 174.2 acres. The improvement cost is approximately $1,290,000.00 The cost per acre to recover this investment is... $7,405.00/acre The cost per square foot to recover the investment is... $0.170/square foot STORM DRAINAGE** Service Area is approximately 128.1 acres. The improvement cost is approximately $375,000.00 The cost per acre to recover this investment is... $2,927.00/acre The cost per square foot to recover the investment is... $0.067/square foot **Storm drainage costs also could be recovered on a storm run-off generation basis for each parcel in the service area. These flows have been determined and are tabulated in the 8/97 Design Report. Post Office Box 1997 - Kalispell, Montana 59903-1997 AMEEMENEENNINiTelephone (406) 758-7700 - FAX (406) 758-7758 MEMORANDUM January 25, 1999 To: Al Thelen / Interim City Manager From: Jim Hansz, Director of Public Wor Subject: Status of US 93 South improvement project In October a detailed update of this project was presented to the City Council along with an outline of the options and staff recommendations for the difficult task of financing the cost of the City share of these improvements. Attached is a copy of that briefing. The present status of this project is: • Design is virtually complete. Utilities have been finalized and a Plan in Hand meeting to review everything will be scheduled for February. This date will be decided by MDT. At that time the review comments will direct any required changes of the design, and then a final cost estimate can be prepared. • Present cost estimate for the City's share of the utilities is: , • Water $830,000.00 • Sewer $1,290,000.00 • Storm Drainage $375,000.00 • Goodwill $135,000.00 Total $2,630,000.00 (Signal costs at 3'd Ave. E. for the Rosauer's project are about $150,000.00) • When the last details are completed on the final dsign, the consultant.will draft a partnership agreement between the City and MDT based on the few examples presently available. • No decisions have been made yet on the approach to funding the City's part of this project. This is not a staff decision. It is also not one that should be expected tonight. • Mr. Haarr indicated at the last City Council meeting that he had heard there was a possible one year delay of the project. We have.questioned MDT on this and have not learned of anything that supports this. They are experiencing some ROW acquisition problems on the north half of the Somers/Ashley Creek phase, but this should not impact the north project. L- Post Office Box 1997 • Kalispell, Montana 59903-1997 Telephone (406) 758-7700 • FAX (406) 758-7758 FORSGREN ASSOCIATES, INC. KALISPELL HIGHWAY 93 SOUTH UTILITY IMPROVEMENTS STATUS AND FUNDING DISCUSSION COUNCIL WORK SESSION October 26, 1998 PURPOSE OF MEETING • Reacquaint Council with project background and report on current status • Explore issues requiring attention: — project costs — funding sources and mechanisms • Recommend course of action • Develop implementation strategy BACKGROUND 970641STATUS • MDT is planning to construct major improvement on US 93 from Ashley Creek to the Courthouse (8th Street) beginning in the spring of the year 2000 (see Exhibit A) • City is designing major utility improvements and logical extensions of utility service into unserved areas to coincide with the highway improvement project Reasons for the utility improvement project include: — provide for health and welfare of area residents — address concerns over age/condition or efficiency/performance of some facilities — develop "proactive" rather than "reactive" approach to growth and utility delivery — formulate orderly plan for growth of Highway 93 South commercial area while enabling economic development and enlargement of the tax base — maximize convenience and cost savings by combining utility improvements with highway project — answer public demands for utility service PROJECT STATUS • Right -of -Way plans complete, will begin acquisition process in January (MDT) Design work essentially complete: — highway 90% — water, sewer, and storm drain 95% — landscape 95% A COMPANY OF PROFESSIONAL ENGINEERS 15 MADISON AVENUE WEST YELLOWSTONE, MONTANA 59756 / (406) 646-9340 REX84VRG / BOISE / EVANSTON / WEST YELLOWSTONE / SALT LAKE CITY / WENATCHEE • Cost estimates developed • MDT funding in -place • City funding uncertain • Current project schedule: — plan -in -hand review December 98 — right-of-way acquisition process December 98 - June 99 — utility moves (other than City) Summer 99 — City funding in -place Fall 99 — project let for construction Fall 99 or Winter 00 — project construction (including City utilities) Spring - Fall 00 PROJECT FINANCIAL NEEDS 7- • Water System Improvements $ 830,000 • Sewer System Improvements 1,110,000 • Storm Drainage System 1,015,000 Total $ 2,955,000 Note: costs include construction, inspection, legal, and managementladministration POTENTIAL FUNDING SOURCES • Existing utility funds: — capital improvement funds from water and sewer (potential amount = ?) — storm drain fund (potential amount ~ $500,000?) — legal/administrative costs negligible Special Improvement Districts (SID): — by service area (see Exhibits B, C, and D) — assessment to property owners proportional to property size, property value, or front footage (potential amount = needs) — may need Rural Special Improvement District (RSID) outside City limits sponsored by County with agreement for City administration — legal/administrative costs about $30,000+ per District depending on size and complexity (these costs will be in addition to identified project costs) Tax Increment Financing Districts (TIF): — bond for capital improvements based on projected increases in tax revenues from anticipated development — two Districts already established within project boundaries (see Exhibit E) — Downtown TIF (eligible amount = $800,000) — Airport TIF (eligible amount = $3,500,000) — legal /administrative costs about $20,000 per District (these costs will be in addition to identified project costs) Economic Development Grant: - through Montana Department of Commerce (potential amount = $500,000) - based on infrastructure needs for growth/development areas - tied to job creation, requires specific comment(s) from local. business(s) - requires competitive application, significant administrative effort, and about one year to develop (applications next spring) - legal/administrative costs about $40,000 (these costs will be in addition to identified project costs) Community Development Block Grant: - through Montana Department of Commerce (possible amount = $500,000) - based on public facilities needs and priorities - tied to low -moderate income areas (income survey needed to document 51 %+ LMI) - requires competitive application, significant administrative effort, and about one year to develop (applications next spring) - successful competitors usually have high LMI or significant public health needs - legal/administrative costs about $40,000 (these costs will be in addition to identified project costs) • Other Possible Grant Programs: - Economic Development Administration - Public Works Grants (EDA) - Department of Natural Resources and Conservation -Renewable Resource Program (DNRC) - Montana Department of Commerce - Treasure State Endowment Program (TSEP) • Loan Programs - USDA - Rural Development (RD) - Montana Department of Environmental Quality - State Revolving Fund (SRF) - Montana Department of Commerce - Board of Investments Term Capital Program (INTERCAP) • Land Sale Proceeds: - revenues from sale of City lands, e.g., Daley Field (potential amount = ?, currently obligated) - legal/administrative costs minimal • Hook-up Fees: - developers/owners reimburse City for capital improvement costs through a hook-up or connection fee - usually used to replenish loans from capital improvement funds - can be used to capitalize improvements if advance commitments obtained, e.g., large developers (potential amount = uncertain) - legal/administrative costs minimal Partnering: - cooperative agreement among vested interests to maximize overall benefits through pooling of resources and assignment of responsibilities according to strength /capabilities - based on principle of synergy (1+1 = 3) - requires careful delineation of responsibilities and willing cooperation of parties (good faith) — usually doesn't generate capital but often reduces costs to all parties — examples: West Yellowstone, Eureka • Develop partnering arrangement through cooperative agreement with MDT City responsibilities: — contribute cash infusion of $2,400,000 (detailed below) — provide certified design, drawings, and specifications for water, sewer, storm drainage, and landscape systems meeting applicable federal, state, and local design standards — perform inspection and contract administration services forwater, sewer, storm drain, and landscape construction (cost included above) — accept responsibility for ownership, operation, and maintenance of water, sewer, storm drain and landscape systems, and the lighting system within City limits MDT responsibilities: — provide remainder of funding necessary for project construction — acquire rights -of -way, provide for relocation of conflicting utilities — perform all contract administration and management, and provide all inspection and testing services, except as noted above — provide certified design, drawings, and specifications for highway, signals, lighting, .signing and striping, drainage, and other highway -related items • Basis of developing Kalispell cash contribution: — water $ 830,000 — sewer 1,110,000 — storm drain 325,000 — good will 135,000 Total $ 2,400,000 *Note: calculated by "add -on" method versus "proportion of flow" method = $1,015,000. Traded off through ownership and operation of system plus good will cash contribution. Advantages of partnering agreement: — maximizes strengths, resources, and capabilities of MDT and Kalispell — reduces Kalispell cost! — places cash in common project pool without need to track where spent — allows City funding sources to be fully tapped — eliminates concern over development of utility systems outside City limits — minimizes annexation discussion Potential funding sources (starting place for discussion!): — Downtown TIF District $ 800,000 — storm drain fund 400,000 — capital improvement funds 200,000 — Airport TIF District 1,000,000 Total $ 2,400,000 • Project phasing is also a possibility but is not recommended unless absolutely necessary (will result in greater cost and increased disruption) NEEDED ACTION • Determine project funding approach [Council] • Identify and target funding sources [Council] • Develop implementation strategy [Council, staff, and consultant] • Commit to proactive and aggressive implementation action [Council/MDT] • Implementation schedule: — decide on approach and identify funding sources by December 31, 1998 — complete legal/administrative work to utilize funding sources (TIFin particular) by July 31, 1999 — have bond issuance legal structure in -place by November 30, 1999 — issue bonds (cash in hand) by March 31, 2000 — Perform construction management/inspection services April 1 to July 2000. Execute any necessary outside service contracts for this work by February 29, 2000 NOTES ON COUNCIL DISCUSSION HIBIT A a ®� �� P ECT LIMITS --- - a -- TR ASURE � r SUHDIVISIO DO st 1 • " � f"''��—s' g e �f� �lR6ASIA — --�/ ••�cl.. ,Yd l io INS ��\ S��✓ -T— �. � am PROJECT LIMITS -- —v_ � I°T 7 � x LOT I L �N` U 1� I NO H f YY >d FISHER SUBDIVISION 4 � u f ' T c N❑ H 4 l rl ,:d� - - - z _ n EXHIBIT B 7-' WATER SERVICE AREA ,A-vg- -- �Al WIN %SM r Y I I I I u TR ASURE SUBDIVISIO BLK 3 I =_ }z>a }a —'�"� Hd v xa�iily� yK,l so } I '�uu I a �'rrivA'A .% m I sx v r 2 1 1 I x I m IF EN s __ _ ��� j� / EN CDRNFR2 SUB I 2 � ..+p„ � Isa �� rn 5•nl n [ M S` r _1 _ BLK BL � t z I 2 / G I tl ' I N M 1�1 to I iC A ,WW IDHALS b IA I.IOY I 1, 2T 9 1 I f 3. ' �I-1 :�I['" I SUl AIIIIVISIOI r e x W 22 3D IK A20tY rS �W W I 21 � v tA1 Y11. RCIM 3• �� _ IM � 2M11 !u7 t w W .D. ]AI I i"b Iv 3AC DMI I ES 2AAK� r i au[es Lzmc 3G "SLR 2M f 1a j]QU ��)� per. u an w 2A ]DC I TAMo 3MB \ p Lot I !7_' I i YI -- 2G/ � )A 7M1 Y I• 7• r]G TI \, \ t tt17U YIN Cpco 9� , COIHLY RATISA/ I♦ 2. � ni ---- i I CNRISTIux \�\� ✓� 7w LOT 6 mnla 2J1 `. - _ z AI —' a ------ 3 s I I AG m.M 2[ " bD Y YaH I xy I ! 2f1 YG IA 2E SH SC®. SGa 1♦ WATER SERVICE AREA "' s ] LOT 7 —` I x scu IK 6 Q$K ] ' EK J -- ] IIEC LDT 1 3J SNIA� SulN f 2 I NO TH �— 2. 7 I g 2• !r I_---�1 - I 'J I Illf��� IIV Ills a•�Y 51[M— 71 : )M SL 51[AI '' 9t11 I FISHER/ S ITM uec { INl 1 �' 1A SUBDIVISION IAC I ] 1 � ] 1 _ _. .- _ ✓ I _ . A — 11 , IZA � ._.__. 11 i AHIBIT SEWAGE COLLECTION SYSTEM SERVICE AREA _ ]AA 12 I 3+ 3AALto Hl 4/ U M n aGY; ]H y n Y 3 u a n I n Y Y 1 RCA !Ar W aut )Y a Y a a a Y ry SrR _2A. w Y n __ _ __ _._ • AAB/A7F 2MJ 3AC i I 3ACB ]B3LERS 2AA PROPOSE NE GRAVITY EXTENSION�` OF MONK LINE - J i i, ]BR )OC 1A � ' Y 3AA8+ e ¢. a 2MB n _ J W � - ) � mn IT ��` ' Jon.. 78j IN u41 TO WWTP L S ' 3ACI r u 20 I 1A+C t •— , )AB _ < A AN LAi i 3ACA. 2HNEW 61'/. --�- 3 2L )A FORCE MAIN x - 2i ` A.C• 28 ._. IB ".. IB 2C ` SCN CWRE THY �SnpP CSTIA )Li I+ 2 A .\r. 2. CHRIHRISTIAN 5CG `.� _ SCHOOL 6 [MB,GR LOT' 2J _ nni XG .._,-V 5 I AD BLDG SBB 58 J 2 ] A I - .__-.._-�____________ i.. __________L__ - __. -- --- - - NEW 8" GRAVITY SEWER '" 6. -_'__. _ E scu - _ i xeB COLLECTION MAINS BOTH .! ----- ---- -- G, SJ____----_- _ xi Y. _ SIDES OF HIGHWAY - xa -- ---_-- - LOT 7 I S 1 5GC y, xi = 5Cn1 O s `�•- LOT 8 2A I i r'—✓J .2. HEG IS 1 I l - HR�8 ❑E[ 5n. Snit SRB — 1 AB HED HE ]• - 9 sAA i �J�`.�� u _ • SAB LGT A .V A SHIM , - � ] x i i i I2A r 12M ISGDSCK 50 SC --------- -- . 3 a; H uv nB L 'G Ji I ]i )'u ISAA \ tI1T 3 12L—IA CQNSRY , i � ISG. IE LILL3L r5K FSKBB ( )A A 2 m\'aE'15H :' IS APPROXIMATE I.M; uAc HAi I Ii FISHER I SUB➢IVISION ASML.EY SERVICE AREA "---- , NEW SEWAGE BOUNDARY 2 LIFT STATION _ , ' Y _.. ] t 30 _. 1 IA ItAp � A 3 IB t .._to 14A 9�B )'6 3 - IA 4 Q• \t` IB a 16 IS w• I , i HLISSNES3': I (' t i 9. I 1 AR s 19 20 i i m i tl ,� { ��r0 '--�J c _ i I 64 I n N, PAPY RS JCM- 2 i .. )LA. JCA. - _. 1 1, NO TH _________..{_________________ Is Ic \� a ze30 noo ,oao 7. I -_.33 3A _.-.. WA _...I. -f�• �S � i LSS' ,!�+�'! ii' �•� ems. �:��. � � psi �!� aim �;.•., i \. !' i•� Lt'y7 � � �:.� r.� 1�• i; �; ��i, n, „�:�+iE iris; � s �-� ■ ■ ♦ • >v 41 =• v,� y �•" , fig s L� �._ , r,.s� +� �, k. ,�,•� ; �� `fly "' ,,._,}•� �1��1 si ..• rr:OL IBC :►��—' ' a?� F3� !i•� � 's��1�' e� � r ,';ram ;i�. s��� S� �u����.' low' 11'� ., i^•71? n:iiy::il,ln�n:a NEW U—Mrs v sue' - ° am' un im 1 :1 1 VI —I VY IN 11.J YY/ I r LJ 117 1 rlI l-, i v_a__ EXHIBIT E G1/y17 �.�_ -�-' TI F DISTRICTS DSp{rtY QI I�( � I t jam _ I _ } 1 � 1 � W TR ASURE — I z T � i' In •• J � 1 `m � sM v v 91yi „Ly� sn � 7 l �� Ia I� 4tulv'V' � Q l� i .I ] / i BLK 1 1 SiN T I14 .'C' A 3 ]. N W I -III Iy1/ `w11WLL tlO]M) � «• 2x 11 _r]D - --- 7 Y u\\ \ M ]AA ]Mf IN` QIN ✓� .� �' IK AK I W I• "" I. n x ]. n r.v s -. v to ]. ' r n 9. Y..., ]ACI ES �f DD A --- — -I- �p a� >M j AIF'PDRT TIF w \999MHiI �rLLtl ) ]AAY. 3MB♦ DISTRICT 2 °' >° W n IL SUYD (LATKAD II NO 1091 �• ]M II ]1 1[0 I. M CHAISf1AN SG I LOT AG SLDG I • ID LOT 7 U ] M g. Ic 3 l - - -- --- of , LOT 1 J ILM \IICG c . Itl �— f ❑0 IC - SW SNIT �1 Sz Su Sxl/.A LOT L—� z. AIeI�I L 9 x � 1 NO TH i . �§✓S�u-� � s1 � Isc `i— 1 �D ' _ yS,➢T TA O 9E0 .00 Ina •_ t 1 1 i I z I' j I I� - ua I ' u+l 1 IIe F ISH R E SUBDIVISION - qSH ) 'V4iE4ij —L I. dl ]4 )I I . _ _____-____.- --------------